Millions of gamers could not use their PlayStation 4 after an apparent cyber-attack at Christmas.
Photograph: Chesnot/Getty Images

Millions of people could not use their games consoles for a second day as disruption on the Xbox Live and Sony Playstation networks continued after an apparent cyber-attack.

A group calling itself Lizard Squad claimed responsibility for bringing down both networks on Christmas Eve, which could have affected nearly 160 million gamers.

Even an intervention by eccentric internet entrepreneur Kim Dotcom, who offered the hackers free lifetime use of his file storage service, does not appear to have ended the attack. Known as a distributed denial of service, or DDOS, the attack is overloading the systems of both services by generating fake access requests.

Such an attack can prevent people from playing games even when they have a physical copy as newer consoles often require online authentication as an anti-piracy measure.

Games consoles have replaced DVD players or cable services as the primary entertainment system in millions of homes, offering apps including Netflix, Hulu and BBC iPlayer. Some of these services have remained accessible but users have complained of outages where services require a login.

More than 110 million people use the PlayStation Network (PSN) and at least 46 million use Xbox Live, both of which connect players to other gamers and services through the internet. It is not yet known how many consoles were sold for Christmas 2014, but since the PlayStation 4 launched in 2013, Sony has sold 13.5m, while 10m Xbox One units have been shipped since it launched in 2013. Both sell for more than £300 ($460).

Many users, including those who were given games worth at least £30 each for Christmas, have taken to Twitter to vent their frustration. @Swan-City said: “I’m having issues accessing the PSN just unboxed my ps4 downloaded firmware now can’t get log into PSN to download games”, while @nerdrock “Real shocked I’m unable to enjoy my new PS4 on Christmas morning. Good job, PSN.”

@schumi500 said: “I am glad to see the Christmas spirit isn’t dead with Hackers taking down #playstationnetwork and #xboxlive to spoil children’s fun.”

The motive for the attack is not clear, but Lizard Squad had apparently threatened to target both networks at Christmas, using a now deleted Twitter account to describe itself as the “next-generation Grinch”. A new Twitter account had amassed 150,000 followers by midday on 26 December, seemingly encouraging gamers to follow it on Twitter to prevent further attacks.

Sony has not responded to requests for comment. Its official Twitter account repeatedly responded to users’ complaints with the same message, but did not acknowledge an attack: “We are aware that some users are unable to access at the moment. Our technicians are working to fix this issue.” The official PSN status was listed as “offline” at the time of writing, while Xbox Live is “limited”.

Microsoft would not comment on the cause of network problems but a spokesman told the Guardian: “We are aware some users are unable to sign in to Xbox Live. Our teams are working to resolve the issue. Visit xbox.com/support for status updates.”

The news is damaging for Microsoft but particularly for Sony, which suffered a high profile hack in early December by a group called Guardians of Peace. Stolen emails were leaked and published, revealing embarrassing exchanges between executives and celebrities, while stolen files and even film scripts left the company so exposed it has reportedly reverted to using fax machines and paper in its offices.

Though a different division from the hacked Sony Pictures, Sony Online Entertainment has been plagued with outage problems previously. PSN also suffered downtime during Christmas 2013 when the PlayStation 4 had its first holiday season, and a confirmed DDOS attack would reinforce the theory that Sony’s networks are still not resilient enough to withstand increased demand.

Lizard Squad surfaced in August 2014 when the group claimed responsibility for hacking the PlayStation Network, the servers of games company Blizzard Entertainment and tweeted a bomb threat for an American Airlines flight carrying Sony Online Entertainment president John Smedley, which had to be diverted.

It claimed to have brought down the servers of more high-profile games in September, targeting Destiny, Grand Theft Auto Online and Call of Duty: Advanced Warfare, and took PSN and XBox Live down again on 1 December. It then threatened to repeat the attack on Christmas Day.

A rival hacking group, Finest Squad, claimed to be attempting to stop them, saying it would dismantle the group and hand their details to police; it claimed a part in the arrest in December of a 17-year old in British Columbia, Canada, who had been making hoax calls to the emergency services.